Cash-Strapped Batswanas Finding It Harder to Get Loans

harder to get loans

Increasing numbers of Batswanas are turning to credit to make ends meet.

One result is that local banks are becoming more reluctant to grant loans to individuals. The Bank of Botswana (BoB) has cautioned banks about lending, particularly to customers with high personal debt and/or low personal income.

For cash-strapped Batswanas, this may make it harder to get loans – at least from traditional banks.

Personal debt on the rise

From 2013 to February of 2018, household debt in Botswana rose from 2.4 billion US dollars (USD) to a staggering 3.5 billion USD. That’s roughly equivalent to 36.2 billion pula.


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Despite maintaining the bank interest rate at 5% in an attempt to boost economic activity, the Bank of Botswana remains concerned about the increase in non-performing loans in the local banking industry. A drop in the annual growth of mortgages also suggests that banks are getting tougher about who they give loans.

More people turning to disreputable lenders

Financial pressures, along with banks’ tighter lending criteria, have caused more people to turn to disreputable lenders to get the money they need.

When cash is needed for an emergency, it’s understandably tempting to take a loan from an unregulated micro lender – but borrowers risk losing money and paying exorbitant interest fees.

Asset-based loans

Just because borrowers already have some debt or a low income, doesn’t necessarily mean they can’t get a loan. Asset-based loans use a paid-off asset as collateral, negating most of the criteria that commercial banks expect in order to approve a loan. This asset can be anything from a vehicle to a luxury watch.

The asset is securely stored as collateral until the loan is repaid but it always remains the borrower’s property. Once the loan is paid off, the asset is returned to its owner. Because the loan amount is based on the value of the asset, it’s not affected by a credit score, existing debt or personal income.

Advantages of an asset-based loan

An asset-based loan has a number of potential advantages over a traditional bank or personal loan:

  • funds are paid out fast – usually within 24 hours of application
  • the loan doesn’t affect your credit score
  • risk is minimal – the loan is backed purely by the asset you provide as collateral
  • once you repay the loan and agreed interest, your asset is returned to you
  • the application process is simple, quick and transparent.

Asset-based loans from lamna Botswana

At lamna, we’ve been offering clients asset-based loans for several years. We’re a well-established speciality finance company with branches across South Africa. More recently, we opened a branch in Gaborone, offering short-term asset-based finance solutions to Batswana.

At lamna Botswana, we offer fast, discreet loans against the value of a wide range of assets, from luxury watches and jewellery to vehicles or valuable works of art. For more information about using an asset to secure a short-term loan, contact us on 71 388 088 or simply complete and submit our online application form.


Complete our Online Application Form